The next Industrial Revolution what role for Government

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The next Industrial Revolution what role for
Government?

• Stewart Davies, Business Commissioner
• 27th November 2007

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Where Do We Need To Be?
Global emissions will need to be reduced to
less than 5 GTCO2e, over 80 below current annual
emissions (Stern, 2006)
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Priority product-service systems
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Next Industrial Revolution

• Megatrends needed
• Power generation
• Industry manufacturing
• Consumer Choices
• Buildings
• Mobility

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Mobility 2020

• A rapid shift to low-carbon mobility with
  in-reach technologies

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Todays personal mobility system is grinding to a
haltsell the dream, live the nightmare?
Mobility system today
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Getting a free ride?Transport is the only major
sector of the UK economy which plans not to
contribute to CO2 reductions in the first decade
after Stern
Mobility system today
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Consumers want solutions for their lives that are
affordable, desirable, and sustainable
Oil price races to 100 dollars a barrel
Looking ahead
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Consensus pathway to low carbon mobility
significant challenges due to locked-in
behaviours and technologies
Looking ahead
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Car marketing isnt greening the fleet 55 of
advertising spend is on cars emitting over 165 gm
CO2/km
Supermini 753,872
Lower Medium 694,428
Looking ahead
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Consumer behaviour

• Travel by car is the default option

• Journeys more frequent, higher mileage driven
  with low occupancy rates

• Purchase costs are felt to be the most
  significant outlay, while running costs have
  little impact

• Early signs of change linked to urban traffic
  schemes and pay as you go services

Mobility system today
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Product-service mix

• Individually-owned cars/light vehicle market
  dominates the mobility system

• Internal combustion engine powered vehicles
  highly engineered for performance and comfort

• Sector growth is largely in heavier, high
  specification vehicle segments that sustain
  profit margins

• Finance packages drive business model
  sustaining new vehicle sales

• Comprehensive fossil fuel distribution network
  locks system into prevailing technologies and
  revenue streams

• Alternative mobility options are relatively
  expensive, inconvenient, unreliable, often unsafe

Mobility system today
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Efficiency

• No reduction in fleet CO2 emissions

• Fuel supply and materials recovery external to
  the product-service system

• Grey fleet market is a barrier to improving
  overall efficiency

• In-reach efficiency-enhancing technologies left
  on the shelf by OEMs

• Growing urban and motorway congestion offset
  gains in vehicle performance

Mobility system today
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Mission To create a new market for efficient
cars by 2020 which will help the motor industry
to create value from low-carbon personal mobility
and achieve the transition to low carbon cars in
decades 2-3 A.S.
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Mobility 2020 roadmap
Emissions from passenger vehicle
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Mobility 2020 vehicle standard criteriaaim to
reinforce beneficial behaviours of players
drivers/marketers/designers

• 80g/km running emissions
• Maximum speed 75mph
• Maximum power limit, not acceleration
• Equivalent passenger safety standards
• Improved pedestrian safety standards
• Dashboard information on instantaneous fuel
  consumption, CO2 emissions and trip costs
• Reduced embodied energy of the vehicle
• Discrete MOT elements required
• Efficient route planning technology for driver
• Ability to pick up local speed limit signal
• Declare metrics on non-functional mass (bolted-on
  extras), rolling resistance (tyre labelling)

Step 1 Define a standard
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System standard differentiates green from
greenwash

• Benefits
• The new product-service system, the related
  standard and accreditation scheme end confusion
  around what is a green car
• Lays the foundation for a radically different
  marketing conversation consumers are empowered
  to choose a low-carbon personal mobility option
  that works for them
• Facilitates collaborative problem solving and
  innovation
• Sets a level playing field for the new generation
  of cars

Step 1 Define a standard
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New market product-service system transforms
consumer experience of personal mobility and
incentivises switch to Mobility 2020 vehicle
standard
Step 2 Create the platform
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Full page
Mobility 2020 Web page

• Plan works on the basis of a lease scheme,
  approaching PAYG motoring
• Choose the service plan which suits you
  according to your predominant travel
  behaviours/preferred mode of transport
• Choose your car

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Launching the platformintegrated mobility
services create new Mobility 2020 market

• Offers access, use and integration of services
  across mobility modes
• Empowers consumers to choose more efficient
  patterns of vehicle ownership
• PAYG convenience offers immediate appeal to
  consumers
• Aligns players in value-chain with sustainable
  outcomes
• Stimulates investment in intelligent
  infrastructure
• Could represent a consumer-based challenge to old
  patterns of behaviour.

Step 2 Create the platform
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Growth of new Mobility 2020 marketexpands from
core of ready now segments to serve majority
market
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Business opportunityexpanding the space to
deliver customer value over the life of a product

• creates a mainstream market for lightweight cars
  enabling the supply chain to compete in a new
  space
• generates value stream through whole-life service
  package including servicing, maintenance,
  component upgrading, fuel, parking etc
• employs pay-as-you-go finance systems to minimise
  cost and align with shift away from credit
  culture
• builds communities around fleet-based services
  (car clubs, lift share etc)

Looking ahead
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Governments roleGovernment can effect change
through policies and practice, rooted in
awareness of consumer behaviour and collaboration
with business